The business world of today, particularly in the IT industry, is an interdependent network of large and small companies working together to bring customers the total experience they want. Managed service providers can’t operate in a vacuum, and it makes sense to team up with companies that can “fill in the gaps” so that when your customers need a service or product that you don’t offer, you can still help them fulfill their needs.
The trick is selecting the right partners. Most people wouldn’t go out and marry the first prospect who looks good on paper (or just plain looks good), nor would they form a business with a co-owner whom they haven’t thoroughly vetted. Yet there are many decision-makers who join up with other companies in a “partners’ program” without giving much thought to the factors that go into making such a partnership work.
Large companies such as Microsoft, IBM, Xerox and the like have formal partners programs by which they form a business association with other companies to benefit both. Partnership programs vary, depending on the nature of the businesses and the goals of the partnership. Some partnerships are about authorizing other companies to sell/resale a company’s products or solutions. The smaller company benefits by having the resources and reputation of a large, well-known business behind it. They can sell a large portfolio without having to maintain an inventory, and the large company may provide training, customer databases, etc. and even handle fulfillment and billing. The larger company benefits by having many independent outlets selling its products and solutions.
It makes sense to join the partnership program of companies whose software, hardware and other products you use. But be sure to investigate the cost, your obligations under the program, and what you get in return. For example, if part of your business includes being a Microsoft solutions provider, you can join the Microsoft Partner Network (MPN) – but it’s not always easy to figure out exactly what it will cost you. There’s the cost of the membership itself, which ranges from free to over $5000 for the “Gold” level.
The most basic level costs nothing but you do have to agree to participate in online training and fill out a company profile. You get newsletters, Redmond Channel Partner magazine and other resources, as well as listing in the partner directories. The Small Business Silver Competency level is a popular one that costs $999 (an introductory fee that has been extended to June 30, 2013). Benefits include software for internal use, technical and sales training, and the right to use the Microsoft competency logo. In addition to paying the fee, you have to meet other criteria: employ or contract with one or more Microsoft Certified Professionals (MCPs) who have passed specific qualifying exams, employ or contract with a person who has passed the licensing assessment and one who has passed the business-focused small business assessment, and sign the Microsoft Online Services Partner Agreement. You must also provide customer references. For more info about the MPN, see https://mspartner.microsoft.com/en/us/Pages/index.aspx
Companies also partner on a more “equal” footing – for example, in a business innovation partnership whereby companies work together to create new products and services. Developer programs enable companies to create software solutions or services that integrate and work well together. Another type of “partnership” in which businesses engage would be collaborations or coalitions aimed at promoting a specific cause or achieving a social or political goal, such as furtherance of education.
Partnering with other small businesses can help you to get contracts or clients that you wouldn’t have the resources to handle on your own. To develop such partnerships, you need to seek out other small businesses whose areas of specialization/expertise and/or personnel are complimentary to yours. It’s best to start out by working together on a relatively small project as you grow the business relationship. Be selective, but developing multiple partnerships can help you to get more business than you otherwise would.
Business partnerships between small companies may be more casual – but it’s important, if you want your MSP to team up with another company, to have a written agreement that lays out the responsibilities and obligations of each party in a clear-cut manner. As with any other partnership arrangement in life, what starts out well can go bad, and having a legally binding contract that governs the arrangement – including how it can be terminated – is the first step in protecting your company (and in some cases, your personal assets) if the relationship sours.